The Future of Online Privacy: Online advertising and behavioral targeting Kristina Irion Third Internet Governance Forum

1. The Future of Online Privacy:Online advertising and behavioral targeting Kristina Irion Third Internet Governance Forum Thursday, 5/12/2008

2. The Future of Online Privacy:Online advertising and behavioural targeting • Agenda • Definition • Data collection practises • Further processing of personal data • Applicable regulation & effectiveness • Consolidation in online advertising markets • Conclusion

3. Definition Online advertising and behavioural targeting: • Definition FCC staff working paper (2008) “… online “behavioral advertising”means the tracking of a consumerﾕs activities online -including the searches the consumer has conducted, the web pages visited, and the content viewed -in order to deliver advertising targeted to the individual consumer’s interests.”

4. Data collection practises • Business model for Web 2.0 (multi-sided markets) Onlineadvertisement Free servicesand contentattract users Subscriptions generateuser profiles Data from usage/ traffic patterns Personalised/ targeted advertisement • Search engine • Social network • Online newspaper • Photo sharing websites • …… Behaviouraltargeting

5. Further processing of personal data Enrichment of data from other sources • Combining with data from other services or publicly available information Data mining • Describes a technology that discovers non-trivial hidden patterns in a large collection of data, which can provide insights into individual lifestyles and their social and behavioural patterns. Trading with personal data • Transfer of user information to third parties

6. Applicable regulation & effectiveness • EU Data Protection rules Requires informed consent of the data subject Downside: • Bundling with the service offer • Generated via terms and conditions (?) • Reliance on and life-span of such a consent • Non-European services • U.S. model • Self-regulation based on privacy statements • Fair trade and consumer protection approach • Request for comment to FTC staff paper on Online Behavioral Advertising Moving the Discussion Forward to Possible Self-Regulatory Principles (closed)

7. Consolidation in online advertising markets • Google/ DoubleClick merger Clearance in U.S. and EU (2007) US Federal Trade Commission (FTC) • Merger did not create market power in search engines and online advertisement • Raised privacy concerns, however, are unrelated to antitrust concerns • Privacy repercussions scrutinised as non-price attribute of competition, but argument dismissed European Commission • concluded that the proposed concentration would not significantly impede effective competition • Stressing the application of data protection laws

8. Consolidation in online advertising markets • Yahoo! Inc. and Google Inc. cooperation agreement withdrawn Department of Justice • informed the companies that it would file an antitrust lawsuit to block the implementation of the agreement. • If implemented, the agreement between these two companies accounting for 90 percent or more of each relevant market would likely harm competition in the markets for Internet search advertising and Internet search syndication.

9. Conclusion Behavioral targeting still in its infancy Massive data gathering in preparation Privacy concern stemming from profiling and data mining Different policy approaches in U.S. & EU No effective policy tool tackling concentration of data collections